1970 (2) TMI 15 - HC - Income Tax

Partition of HUF - Whether the memorandum of partition dated May 1, 1957, evidencing previous partition on April 1, 1957, is inadmissible in law for want of registration

Summary

Issues:
1. Whether the memorandum of partition dated May 1, 1957, is inadmissible in law for want of registration?

Analysis:
The case involved a reference to the High Court under section 66(2) of the Indian Income-tax Act, 1922, regarding the admissibility of a memorandum of partition dated May 1, 1957. The memorandum evidenced a previous oral partition on April 1, 1957. The dispute arose from the assessment of income-tax for an undivided family, where the partition included various sources of income and properties. The Income-tax Officer and the Appellate Assistant Commissioner held that the memorandum required registration for validity, and the absence of registered deeds for immovable properties vitiated the partition. The Tribunal initially held that registration was not necessary but later concluded that the document was compulsorily registrable, leading to the reference to the High Court.

The main issue for the court was whether the memorandum dated May 1, 1957, required registration. The court determined that the oral partition on April 1, 1957, effectively partitioned the joint family properties, converting joint ownership into individual ownership. The memorandum merely recorded this partition and did not create new legal relationships. The court held that the memorandum was not hit by section 17(1) of the Indian Registration Act and concluded that it was not compulsorily registrable. The court cited relevant legal principles and case law to support its decision.

The court also addressed a contention regarding the question not arising from the appellate order. It clarified that a question of law did arise from the Tribunal's opinion that the document was compulsorily registrable, leading to the acceptance of the reference. The judgment was delivered by G. K. Mishra, C.J., with concurrence from S. Acharya, J., who agreed with the negative answer to the question posed in the reference.

In conclusion, the High Court answered the question regarding the admissibility of the memorandum of partition in the negative, stating that the document was not compulsorily registrable. The reference was accepted, and no costs were awarded.